Behavioral Subgame Perfect Implementation

Abstract

We examine implementation problems in a setting where individuals' choice behavior may not be rational and sequential game forms are considered. First, we present an example where a social choice rule not implementable in "behavioral" Nash equilibria (de Clippel, 2014, Proposition 6) can be implemented in behavioral subgame perfect equilibria using a three-stage game form. Subsequently, we explore the use of sequential game forms in general implementation problems and propose a necessary condition and two sufficient conditions for implementability in behavioral subgame perfect equilibria.

Keywords: Behavioral implementation, Subgame perfect equilibrium, Bounded rationality JEL Classification: D11, D60, D83

JEL Classification: D11, D60, D83